By
Telecom Lead Team: Econet Wireless announced that the Justice
Shuaib of the Federal High Court of Nigeria handed down judgment in the matter
between Econet Wireless (EWL) vs. Bharti Airtel Nigeria, in suit No
FHC/KD/39/2008 (Formerly FHC/L/172/2004).
The
judgment is as follows:
Econet
Wireless of the United Kingdom is a shareholder of Bharti Airtel Nigeria and
holds 5 percent of the issued shares of the company. The court ordered Airtel
to reinstate the shareholding of EWL.
The
court ordered that all actions, and resolutions taken by the company, since
October 2003, at which EWL was entitled to be notified, and to participate in,
as a shareholder, but was prohibited, are null and void. This includes
decisions to sell shares, issue shares, and also transfer shares to third
parties.
The
court also ordered that the name change from Econet Wireless Nigeria, effected
in 2003, was irregular, and must be reversed forthwith.
The
Corporate Affairs Commission (CAC) has been ordered to cancel any certificate
previously issued for the change of the name of the company and restore the
name of the company to Econet Wireless Nigeria Limited.
As a
result of the judgment by the Honorable Justice Shuaib, Econet Wireless Limited
through its lawyers has now written to the company, with the following
requests:
Immediately
reissue shares in the company to Econet to reinstate its 5 percent interest.
Provide
Econet full access to information relating particularly to board decisions and
shareholder resolutions in accordance with the Companies Act, the shareholders
agreement between the parties and in pursuance of the orders of the Federal
High Court of Nigeria.
Econet
Wireless intends to review the decisions taken by the board and other
shareholders to ascertain which actions are in violation of the order of the
High Court.
“It
is universally accepted throughout the world, that when shares in a company are
allotted and share certificates issued, as confirmation of ownership, this is
sacrosanct,” said Strive Masiyiwa, chairman, Econet Wireless Group.
In
October 2003, Econet Wireless received a letter from the chairman of the
company – Oba Otudeko, in which he advised that at a board meeting directors
had decided that Econet Wireless was no longer a shareholder, Econet’s share
certificate had been cancelled, and Econet’s name removed from the shareholder
register. The motive for this unprecedented action was the circumvention of
Econet Wireless’ rights as a shareholder in order to facilitate the sale of
shares, first to Celtel International, and later to Bharti Airtel.
As a
result of these actions, Econet Wireless was left with no option but to seek
redress through the courts. An application was filed in the Nigerian Federal
High Court in October 2003, more than eight years ago. Since then, every legal
avenue to delay the process was pursued by the defendants through their
lawyers, in order to frustrate Econet Wireless.
“I
am very disappointed that whilst it was clear to Celtel, Zain and Bharti-Airtel
that Econet Wireless was a shareholder, they still chose to pursue a path, in which
the end justified the means. It is clear even to those with the most basic
understanding of company law that the board of a company has no power in any
jurisdiction to simply cancel the shares of a shareholder but their desire to
own the company was so great that they were prepared to overlook the facts and
ignore our rights,” Masiyiwa added.
The
substance of this ruling, which was known by Celtel and then Bharti, was a
matter of record in the legal documents of the company. It is also common cause
to even the casual reader that the order given has far-reaching consequences on
the current ownership status of the company.
We
have made it clear to the company, that as a shareholder, we would like to
ensure that all actions that must be taken to comply with the Court order are
undertaken in such a way that there is minimal disruption to the ongoing
operations of the company,” Masiyiwa added.
The
board of Econet Wireless and I remain willing to sit down with Bharti-Airtel,
to review the best way forward for all parties. In the meantime, we have a
fiduciary responsibility to take all of the necessary steps to vigorously
protect the interests of our shareholders.
